2008 (3) TMI 28 - SC - Customs

Applicability of CVD on re-importation of goods - definition of import as given in sec. 2(23) imported goods would include re-imported. Benefit of notification 204/76 cusotms is available only if goods sent for repair only - assessee s appeal dismissed

Summary

Issues:
1. Customs duty on re-imported goods under Notification No.94/96-Cus.
2. Levying of countervailing duty (CVD) on repaired goods.
3. Interpretation of Section 20 of the Customs Act, 1962 regarding re-importation of goods.
4. Applicability of CVD on re-imported goods.

Analysis:
1. The appellant, engaged in recording audio cassettes, imported magnetic heads for repairs and re-imported them, claiming concessional customs duty under Notification No.94/96-Cus. The authority accepted this plea but levied CVD on the repaired goods. The Commissioner(Appeals) remanded the matter, and the Deputy Commissioner levied CVD without distinguishing between new and repaired heads. The Tribunal upheld that on re-import, duty would be as on the first importation, rejecting the appellant's argument based on the Constitution Bench Judgment of the Supreme Court in Hyderabad Industries Ltd. vs. Union of India.

2. The appellant contended that as the magnetic heads were only repaired and not manufactured, CVD should not be levied. However, the revenue argued, citing the Tata Tea Ltd. vs. Commissioner of Customs judgment, that re-imported goods are liable to duty as on first importation. The Supreme Court concurred, emphasizing that re-imported goods are subject to the same duty as on initial importation, as per Section 20 of the Act. The Court noted that the appellant had paid duty on the first importation and thus would be liable for the same duty on re-importation.

3. Section 20 of the Customs Act states that re-imported goods are liable to duty and subject to the same conditions as goods of the like kind and value on initial importation. The Tribunal's decision aligns with this provision, emphasizing that goods re-imported after exportation are subject to duty as on the first importation. The Court upheld the Tribunal's findings, citing the law laid down in the Tata Tea Ltd. case regarding re-imported goods and duty liability.

4. The Court dismissed the appeals, affirming that re-imported goods attract the same duty as on initial importation, regardless of repair or manufacturing processes. The judgment highlighted the legal principle that goods re-imported after exportation are subject to duty and conditions akin to those on first importation, in line with Section 20 of the Customs Act. The appellant's argument against levying CVD on repaired goods was rejected, emphasizing the duty liability consistency on re-imported goods.